Cyprus is a well established and highly respected centre for the conduct of commercial, professional, financial and maritime activities within the region and around the world. The incorporation and use of Cyprus Companies is preferred by many foreigners for various reasons.
Today the island is one of the major business centres in the world and the factors that have contributed towards this outcome are described below:
- The island’s strategic location is offered as an ideal location for the establishment of regional or international headquarters taking into consideration the convenient accessibility by sea and air and the excellent infrastructure.
- Wide and increasing network of double tax treaties offering tremendous possibilities for tax planning (see international tax planning).
- The legal framework and all statutes regulating business matters and procedures are based essentially on English law.
- Generous tax incentives for legal entities. The taxable profits of all Cyprus resident companies are taxed at the rate of 12.5%. Non-resident Companies are taxed on profits from a business activity which is carried out through a permanent establishment in Cyprus, rentals from immovable property located in Cyprus and profits from the sale of goodwill.
- Ship management and ship owning companies are subject to special provisions relating their taxes.
- There is no withholding tax on payments of dividends or interest to non resident shareholders.
- Low personal tax rates for individuals working in (see Cyprus tax law).
- Freely transferable accounts of any currency may be kept either in Cyprus or anywhere abroad without any exchange control restrictions.
- Residence and work permits for the foreign employees and residence permits for their families can be readily obtained.
- Cyprus provides a fairly high, European standard of living while at the same time it remains a fairly inexpensive country.
- Most of the professionals, especially accountants, lawyers and consultants are European trained and members of the respective Institutes and Bodies. They are therefore, able to provide professional services of an excellent standard.
- Non-residents may acquire real estate in Cyprus (residential property or offices) for their private use.
- Non-Cyprus residents taking up residency in Cyprus to work for an employer in Cyprus and whose annual emoluments are more than EUR 100.000 there is an exemption of 50% of their employment income. This applies for a period of 10 years starting from the first year of commencement of employment.